Special Issue on: Designing Internal Organization for External Knowledge Sourcing. Call for papers Submission deadline: 30 th June 2010

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1 Special Issue on: Designing Internal Organization for External Knowledge Sourcing Call for papers Submission deadline: 30 th June 2010 Purpose The aim of this Special Issue is to shed light on the relationship between, on the one hand, the way firms design their internal organizational structures (e.g. allocation of authority; configuration; information processing structures; social networks) and management practices (e.g. incentive-based compensation schemes; training; promotion, recruitment and dismissal practices) and, on the other hand, the pursuit of a model of innovation characterized by interaction with disparate, worldwide dispersed external knowledge sources (e.g. customers; suppliers; other firms; universities; online communities; industrial designers) through different arrangements (e.g. alliances; licensing; acquisitions; informal collaborative mechanisms). Background Two streams of research have been increasingly attracting the interest of innovation management scholars. The first one centers on the design of organizational structures and management practices that shape firms internal innovation activity (Colombo and Delmastro, 2008). Key inputs to innovation and critical processes of acquiring, generating, transferring and applying knowledge, have been shown to depend on the implementation of suitable formal and informal organizational structures (Teece, 1996), human resource management practices (Laursen and Foss, 2003), crossfunctional and/or transnational teams (Haas, 2006), control and communication mechanisms (Nobel and Birkinshaw, 1998), and motivational devices (Osterloh and Frey, 2000; Zenger and Lazzarini, 2004; Lerner and Wulf, 2007). The second stream of research concentrates on the use by firms of external knowledge sources for innovation. This approach emphasizes that innovation is the result of an interactive and distributed process (Von Hippel, 1988), and that in searching for innovation opportunities firms are increasingly forced to open their boundaries and to rely on external actors (Laursen and Salter, 2006). Links to external knowledge sources include acquisitions of and alliances with innovative firms (Kale and Puranam, 2004), licenses and other quasi-market arrangements used in the market for ideas (Arora et al., 2001; Tsai and Wang, 2007), formal and informal cooperative links in geographic clusters (Almeida and Kogut 1999; Sorenson and Stuart 2001). They also include 1

2 cooperative arrangements with talented individuals (e.g. star university scientists and industrial designers) and communities of practices (e.g. developers of open source solutions). These two bodies of research have developed parallel to each other, without mutual beneficial dialogue taking place between them. Arguably, firms need to develop absorptive capacity in order to benefit from external linkages (Cohen and Levinthal, 1990; Lane and Lubatkin, 1998). Furthermore, firms internal resource endowment tends to influence their external knowledge sourcing strategies (Rothaermel and Hess 2007) and their location choices (Alcácer 2006; Chung and Alcácer 2002). However, the mutual relation between firms internal organizational structures and management practices and their external knowledge sources and linkages has gone almost unexplored so far (for an exception see Siggelkow and Levinthal, 2005). Thus, the premise of this Special Issue is that there is a need and opportunity for research to bridge the organizational design and external knowledge sourcing perspectives. Research questions We would like to call for contributions that cover one or more of the following questions. These are suggestive, rather than exhaustive: 1. What organizational structures and management practices are best suited to profit from external sources of knowledge? Do these structures and practices imply the adoption of a leaner organization with distributed responsibilities or centralization of decision authority and a hierarchical approach? How can incentive-based compensation schemes for firm s personnel and internal communication and reporting practices be designed to favor efficient use of external knowledge sources? More generally, to what extent firms organizational design is dictated by the type of external knowledge sourcing strategy pursued by firms? Are specific types of external linkages associated with a specific organizational design? 2. Are organizational structures and management practices contingent on the type of partners (e.g. users, suppliers, competitors, star university scientists, online communities), the purpose of the interaction (e.g. exploration of new knowledge versus exploitation of existing knowledge), other characteristics of the external links (e.g. amount of resources invested in the external link, extent of sunk costs, relation to firm s core business), the institutional setting (e.g. the IPR regime, labor law) and the local environmental conditions (e.g. supply of skilled individuals)? 3. How should firms organize to take advantage from the acquisition of innovative start-ups? What firm-specific (e.g. acquisition and target-specific experience) and deal-specific (e.g. technology and market relatedness) characteristics shape the optimal internal organizational 2

3 re-design following the acquisition? On the other hand, how should innovative start-ups organize to become an attractive acquisition target? Does this organizational design pose new constraints to their internal innovation strategy? 4. What organizational structures and management practices are best suited to benefit from inlicensing strategies? Do these organizational arrangements depend on whether in-licensing aims at overcoming internal innovation shortcomings or rather is an integrated component of an efficient internal R&D strategy? What role does the licensor play in organizing the licensee s innovation activities? 5. How should firms design their organizations to take the most from interaction with talented individuals (e.g. star university scientists and industrial designers) and distributed communities of practices (e.g. open source software communities)? What organizational structures and management practices can prevent or limit leakages of internally generated knowledge in this context? 6. How do firms embedded in geographic clusters design their structures and management practices to take advantage of inward mobility of highly skilled individuals and other sources of knowledge spillins while preventing at the same time outward mobility and spillovers? 7. How can multinational companies design their internal structures and networks to benefit from their external networks? Are lessons learned from one type of network useful in organizing the other type of network? 8. Does organizational inertia prevent firms from adopting an organizational design suitable to external knowledge sourcing? Does organizing for external knowledge sourcing lead to organizational inertia? Does it involve learning effects (e.g. learning by doing, deliberate learning, vicarious learning)? Are these learning effects transferable across different external links (e.g. acquisitions, alliances, licenses)? More generally, we welcome any original contribution, of theoretical or empirical nature, which unveils the complexity and potentially conflicting choices firms face in designing their internal organization for external knowledge sourcing, and provide fresh insights into this important issue. Deadlines and submission process The final date for submissions is June 30 th All manuscripts will be reviewed following the regular EMR double-blind review process. The special issue is expected to be published in EMR s Volume 8 (2011). Please make your submissions to the special issue through the EMR website, at Details concerning submission procedures will be available 3

4 online and in printed versions of the journal. A conference organized by DIME and Politecnico di Milano on Organizing for networked innovation is scheduled for April 2010, where prospective authors may present their work and receive comments and feedback. Note that participation to the conference does not imply acceptance for the special issue. Conversely, attendance is not prerequisite for publication in the special issue. For additional information, please contact the special issue editors: - Massimo G. Colombo, Politecnico di Milano ([email protected]) - Larissa Rabbiosi, Copenhagen Business School ([email protected]) - Toke Reichstein, Copenhagen Business School ([email protected]) References Alcácer, J "Location Choices Across the Value Chain: How Activity and Capability Influence Collocation." Management Science, Vol. 52(10), pp Almeida, P. Kogut, B The Localization of Knowledge and the mobility of engineers in regional networks. Management Science, Vol. 45(7), pp Arora, A., Fosfuri, A., Gambardella, A Markets for Technology: The Economics of Innovation and Corporate Strategy. The MIT Press, Cambridge, Massachusetts. Chung, W., Alcácer, J Knowledge Seeking and Location Choice of Foreign Direct Investment in the United States. Management Science, Vol. 48(12), pp Cohen, W. M., Levinthal, D. A Absorptive Capacity: A new perspective of learning and innovation, Administrative Science Quarterly, Vol. 35(1), pp Colombo, M. G., Delmastro M The economics of organizational design. Theory and empirical insights, Basingstoke, Hampshire & New York, NY: Palgrave Macmillan. Haas, M. R Acquiring and applying knowledge in transnational teams: the roles of cosmopolitans and locals, Organization Science, Vol. 17(3), pp Kale, P., Puranam, P Choosing equity stakes in technology-sourcing relationships: an integrative framework. California Management Review, 46(3): Lane, P.J., Lubatkin, M Relative absorptive capacity and interorganizational learning, Strategic Management Journal, Vol. 19, pp Laursen, K., Foss N.J New HRM Practices, Complementarities, and the Impact on Innovation Performance, Cambridge Journal of Economics, Vol. 27(2), pp Laursen, K. Salter, A. J Open for Innovation: The Role of Openness in Explaining Innovation Performance Among U.K. Manufacturing Firms, Strategic Management Journal, Vol. 27, pp Lerner, J., Wulf, J Innovation and incentives: Evidence from corporate R&D, Review of Economics and Statistics, Vol. 89(4), pp Nobel, R., Birkinshaw J Innovation in multinational corporations: control and communication patterns in international R&D operations. Strategic Management Journal, Vol. 19, pp

5 Osterloh, M., Frey B.S Motivation, Knowledge Transfer, and Organizational Forms. Organization Science, Vol. 11(5), pp Rothaermel, F., Hess A.M Building Dynamic Capabilities: Innovation Driven by Individual-, Firm-, and Network-Level Effects, Organization Science, Vol. 18(6), pp Siggelkow, N., Levinthal D.A Escaping real (non-benign) competency traps: linking the dynamics of organizational structure to the dynamics of search, Strategic Organization, Vol. 3(1), pp Sorenson, O., Stuart, T.E., Syndication networks and the spatial distribution of venture capital investments. American Journal of Sociology, Vol. 106, pp Teece, D. J Firm organization, industrial structure, and technological innovation, Journal of Economics Behaviour and Organization, Vol. 31, pp Tsai, K.-H., Wang, J.-C Inward Technology Licensing and Firm Performance: a longitudinal study, R&D Management, 37(2), pp von Hippel, E The Sources of Innovation, Oxford University Press, New York. Zenger, T. R. and Lazzarini, S. G Compensating for innovation: Do small firms offer highpowered incentives that lure talent and motivate effort?, Managerial & Decision Economics, 25(6/7), pp